Is Our Concept of Retirement Wrong?

For generations we’ve been sold the idea that you should work a steady job until you’re 65, build up your pension and then retire to enjoy your old age. But with the rise of remote working, the gig economy, thousands of jobs that didn’t exist a decade ago, is it time to reevaluate the concept of retirement and our relationship with work?

What is the retirement age?

In the United Kingdom, “retirement age” is typically referred to as the age when you’re eligible to receive your state pension. Historically this has been 60 and 65, for women and men respectively. Importantly though, this is only going to increase as time goes on. The UK government passed a new bill a few years ago that means retirement age will be dictated by life expectancy. According to projections, this could see the retirement age rise to 72 for those of us born between 1995 and 2002, with those born after that year retiring at 73.

I don’t know about you, but I don’t plan on working that long.

How can I retire early?

This is probably the question on everybody's mind after reading the previous paragraph. It’s a question I’ve been pondering for a long time, alongside “How can I play more golf?”, “Do I have to work today?”, “The weather is too good to be sat in an office!” — I’ve not even been in the working world for a decade!

So I started to question the idea of retirement and whether our outlook is fit for the modern world. Retirement has been viewed as this defined point in time — I stop doing the things I have to do and instead, I get to do the things I want to do. Does it really have to be that way?

I’m sure you’ve all heard the saying “if you love what you do, you’ll never work a day in your life”. That saying has never been more prominent. So, I’ve shifted my perspective. I no longer view retirement as the point at which you stop working. I view it as the point where you don’t have to work in a job that you don’t enjoy, and you can work in a way that enables you to make the most of your life. That means breaking away from the idea that someone else controls my time and instead that I can ‘work’ a few hours here, a few hours there, and fit it around my life, rather than fitting my life around work.

How can I afford to retire early?

“But what about paying my bills?!” I hear you cry. I totally understand, don’t worry. Money makes the world go round, as they say. So how can you afford to work only the hours you want, doing the thing you love? I think there’s two parts to this:

Build your nest egg

Each month, I attempt to put 10% of my salary into an index fund (Vanguard S&P500) and another 10% into my savings — this is on top of my private pension. I do this because I’m a firm believer in compound interest over time, a concept you will have seen me write about many times before. It sounds obvious but the more money you have, the easier money is to make. The same applies to interest. 1% of £1000 is a lot more than 1% of £100.

My logic here is that the sooner I build a large nest egg, I will be in a position where I can live off that investment. My aim is to get to the point where my investments generate enough money to pay for the essentials — bills and food. Once I’ve covered those, I’m no longer dependent on my salary. I can instead focus on working less, only needing the income to cover the non-essentials, or the wants. Which brings me to the second part…

Focus on your needs, not your wants

Something I’m focusing on is detaching myself from too many “wants” in life. I’m not talking about sacrificing all those nice-to-haves, simply cutting back. We’ve all been guilty of buying the latest fashion trends, the latest cars, the bigger house — but why?

Humans crave connection. We’re social beings. So in someways, “peacocking” is natural — making yourself look as appealing to others as possible so they’ll like you. But do they actually care? I always liken this to the story about the man in a super car — are they admiring him, or just admiring the car?

So focus less on what other people think and more on what you think about yourself. Oh, and there’s also the side benefit of spending less, so there’s more for you to put into that pot for compounding.

Final Thoughts

None of what I’ve written today are new concepts. For years, people have been trying to find ways to retire early — you only have to Google “FIRE movement” to stumble across an entire community. But it’s always seemed so complex. Maybe it is, perhaps I’ve oversimplified it. But for me — this is how I’m changing my perspective.

I’ll no longer view retirement as this far off dreamland as I entire the later years of my life. No, I’ll simply focus on doing what I love doing, not what I have to do.

Let me know your thoughts in the comments — I’d love to discuss this more.